Correlation Between Ethena and Ethena USDe
Can any of the company-specific risk be diversified away by investing in both Ethena and Ethena USDe at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ethena and Ethena USDe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethena and Ethena USDe, you can compare the effects of market volatilities on Ethena and Ethena USDe and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ethena with a short position of Ethena USDe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethena and Ethena USDe.
Diversification Opportunities for Ethena and Ethena USDe
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ethena and Ethena is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ethena and Ethena USDe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethena USDe and Ethena is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ethena are associated (or correlated) with Ethena USDe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethena USDe has no effect on the direction of Ethena i.e., Ethena and Ethena USDe go up and down completely randomly.
Pair Corralation between Ethena and Ethena USDe
If you would invest 36.00 in Ethena on August 30, 2024 and sell it today you would earn a total of 35.00 from holding Ethena or generate 97.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ethena vs. Ethena USDe
Performance |
| Timeline |
| Ethena |
| Ethena USDe |
Ethena and Ethena USDe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethena and Ethena USDe
The main advantage of trading using opposite Ethena and Ethena USDe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethena position performs unexpectedly, Ethena USDe can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ethena USDe will offset losses from the drop in Ethena USDe's long position.The idea behind Ethena and Ethena USDe pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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